Tabling the 2026/27 provincial budget at the North West Legislature chambers in Mmabatho this past week, finance MEC Kenetswe Mosenogi expressed concern about the potential economic implications of geopolitical tension in the Middle East.

The budget tabled for North West totals R179.3bn over the medium-term expenditure framework (MTEF). The allocation reflects an average annual growth rate of 2.1%, rising from R58.5 billion in 2026/27 to R59.6 billion in 2027/28, and reaching R61.2 billion in the final year of the MTEF period. 

Reduction

The budget had been presented in a challenging fiscal environment following a R3.6 billion reduction implemented during the 2025 MTEF. 

“These reductions stem from data updates on the Provincial Equitable Share (PES) formula, which has negatively affected our province’s baseline allocation and consequently, our capacity to fully address core provincial priorities,” said Mosenogi.

Negative implications

The province engaged the National Treasury through the technical committee on finance and the budget council to explain the negative implications of the cuts on its ability to fulfil its mandate. 

As a result of robust engagements, the province received an additional amount of R1.8bn as a cushion to mitigate the impact of these reductions. The additional allocation was distributed during the adjustment budgets and over the MTEF. 

Mosenogi raised concerns about global developments and their potential economic consequences.

“We are concerned about the current geopolitical conflict between America and Iran, which has the potential to result in a surge of oil prices. This will have spillover effects on global food prices, inflation rates, and currency fluctuations. 

“But all is not lost as the increase in the demand for platinum and gold will bring positive spin-offs and a multiplier effect that will contribute immensely to our job creation initiatives.”

Population

The Mid-year Population Estimates 2025 report by Statistics South Africa states North West has a population of about 4.18 million, representing 6.6% of South Africa’s population. 

The report indicates about half of the province’s residents live in poverty and depend on government support and remittances for their livelihoods. 

The provincial government is making deliberate fiscal choices to support development and improve living conditions, said Mosenogi.

“Through targeted investments in education, healthcare, infrastructure development, economic revitalisation, empowerment of women, youth, and people living with disabilities, the North West government is making deliberate fiscal choices to advance and consolidate our developmental trajectory.” 

The budget proposals were aimed at finding lasting solutions to the province’s socio-economic challenges. Mosenogi emphasised municipalities will play a central role in implementing programmes that seek to transform the provincial economy and improve the lives of residents.

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OFM News/Kekeletso Mosebetsi sm/dg